Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Armada Hoffler Properties, Inc. | d870492d8k.htm |
| EX-99.1 - EX-99.1 - Armada Hoffler Properties, Inc. | d870492dex991.htm |
 Armada
Hoffler Properties, Inc. Fourth Quarter 2014 Supplemental Information
1
Exhibit 99.2 |
 Table of
Contents 2
Forward Looking Statements
3
Corporate Profile
4
Quarter Results and Financial Summary
5
Highlights
6
2015 Outlook
7
Summary Information
8
Summary Balance Sheet
9
Summary Income Statement
10
Normalized FFO, Core FFO & AFFO
11
Summary of Outstanding Debt
12
Core Debt to Core EBITDA
13
Debt Information
14
Portfolio Summary & Business Segment Overview
15
Stabilized Portfolio Summary
16
Stabilized Portfolio Summary Footnotes
17
Development Pipeline
18
Acquisitions & Dispositions
19
Construction Business Summary
20
Operating Results & Property-Type Segment Analysis
21
Same Store NOI by Segment
22
Top 10 Tenants by Annual Base Rent
23
Office Lease Summary
24
Retail Lease Summary
26
Historical Occupancy
28
Net Asset Value Component Data
31
Appendix - Definitions & Reconciliations
32
Definitions
33
Reconciliations
38 |
 Forward
Looking Statements 3
This
Supplemental
Information
should
be
read
in
conjunction
with
our
Annual
Report
on
Form
10-K
for
the
year ended December 31, 2014, and the unaudited consolidated financial statements
appearing in our press release dated February 12, 2015, which has been furnished
as Exhibit 99.1 to our Form 8-K filed on February
12,
2015.
The
Company
makes
statements
in
this
Supplemental
Information
that
are
forward-
looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities
Exchange
Act
of
1934,
as
amended
(the
“Exchange
Act”)).
In
particular,
statements
pertaining
to our capital resources, portfolio performance and results of operations contain
forward-looking statements. Likewise, all of our statements regarding
anticipated growth in our funds from operations, normalized funds from
operations, core funds from operations, adjusted funds from operations, funds
available for distribution and net operating income are forward-looking
statements. You can identify forward-looking statements by the use of
forward-looking terminology such as “believes,”
“expects,”
“may,”
“will,”
“should,”
“seeks,”
“approximately,”
“intends,”
“plans,”
“estimates”
or “anticipates”
or
the negative of these words and phrases or similar words or phrases which are
predictions of or indicate future events or trends and which do not relate
solely to historical matters. You can also identify forward- looking
statements by discussions of strategy, plans or intentions. Forward-looking
statements involve numerous risks and uncertainties and you should not rely on them as
predictions of future events. Forward-looking statements depend on assumptions,
data or methods which may
be
incorrect
or
imprecise
and
the
Company
may
not
be
able
to
realize
them.
The
Company
does
not
guarantee
that
the
transactions
and
events
described
will
happen
as
described
(or
that
they
will
happen
at all). For further discussion of risk factors and other events that could
impact our future results, please refer to the section entitled “Risk
Factors” in our most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the “SEC”), and the documents
subsequently filed by us from time to time with the SEC.
|
 Corporate Profile
4
Corporate Information
Management & Board
Board of Directors
Corporate Officers
Daniel A. Hoffler
Executive Chairman of the Board
Louis S. Haddad
President and Chief Executive Officer
A. Russell Kirk
Vice Chairman of the Board
Anthony P. Nero
President of Development
Louis S. Haddad
Director
Shelly R. Hampton
President of Asset Management
John W. Snow
Lead Independent Director
Eric E. Apperson
President of Construction
George F. Allen
Independent Director
Michael P. O’Hara
Chief Financial Officer and Treasurer
James A. Carroll
Independent Director
Eric L. Smith
Vice President of Operations and Corporate Secretary
James C. Cherry
Independent Director
Joseph W. Prueher
Independent Director
Analyst Coverage
Raymond James & Associates
Robert W. Baird & Co.
Stifel, Nicolaus & Company, Inc.
Wunderlich Securities
Bill Crow
David Rodgers
John Guinee
Craig Kucera
(727) 567-2594
(216) 737-7341
(443) 224-1307
(540) 277-3366
bill.crow@raymondjames.com
drodgers@rwbaird.com
jwguinee@stifel.com
ckucera@wundernet.com
Investor Relations Contact
Julie Loftus Trudell
Vice President of Investor Relations
(757) 366-6692
jtrudell@armadahoffler.com
Armada Hoffler Properties, Inc. (NYSE: AHH)
is a full service real estate company that develops, constructs, and owns institutional grade
office, retail, and multifamily properties in the Mid-Atlantic United States.
The Company also provides general contracting and development services to third-party clients
throughout the Mid-Atlantic and Southeastern regions. Armada Hoffler Properties,
Inc. was founded in 1979 and is headquartered in Virginia Beach, VA. The Company
has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes. |
 Fourth
Quarter Results and Financial Summary |
 Highlights
•
Funds From Operations (“FFO”) of $8.0 million, or $0.20 per diluted share,
for the quarter ended December 31, 2014. FFO of $28.1 million, or $0.80
per diluted share, for the full-year 2014. •
Core FFO of $7.9 million, or $0.20 per diluted share, for the quarter ended December
31, 2014. Core FFO of $29.4 million, or $0.84 per diluted share, for the
full-year 2014. •
Occupancy up to 95.7%, compared to 95.1 % as of September 30, 2014 and 94.4% as of
December 31, 2013. •
Increased quarterly GAAP and Cash Same Store Net Operating Income (“NOI”)
2.9% and 3.0%, respectively, compared to the fourth quarter of 2013.
•
Increased annual GAAP and Cash Same Store NOI 2.0% and 0.7%, respectively, compared to
the full-year 2013. •
In the fourth quarter, completed the sale of the Virginia Natural Gas office building
for approximately $8.9 million, representing a cap rate of 6.25%.
•
In January 2015, completed the sale of the Sentara Williamsburg office building for
approximately $15.4 million, representing a cap rate of 6.3%.
•
Entered into agreements to acquire two grocery anchored retail centers located in
Maryland. These pending
acquisitions will add over 185,000 square feet to the Company’s portfolio with a
combined occupancy of approximately 90%.
The Company intends to acquire 100% interests in these centers in exchange for a
combination of common stock and cash including the net proceeds from the Sentara
Williamsburg sale. These acquisitions are expected to be accretive to 2015
FFO per diluted share and are expected to close by the end of the first quarter of 2015.
Both
transactions are subject to customary closing conditions.
•
Entered into a commitment with a syndicate of banks co-led by Bank of America and
Regions Bank for a new, expanded and unsecured $200 million senior credit
facility that includes a $50 million term loan. •
Declared a cash dividend of $0.17 per common share for the first
quarter of 2015, representing a 6.3% increase over the
prior quarter’s cash dividend. The first quarter dividend will be payable on
April 9, 2015 to stockholders of record on April 1, 2015.
•
Introduces 2015 Normalized FFO guidance in the range of $0.85 to
$0.90 per diluted share.
6 |
 2015
Outlook 7
Full-year 2015 Guidance
Total GAAP NOI
$52.3M
$53.3M
Construction company annual segment gross profit
$4.5M
$5.0M
General and administrative expenses
$8.3M
$8.6M
Interest expense
$14.0M
$15.0M
Normalized FFO per diluted share
$0.85
$0.90
Expected Ranges |
 Summary
Information 8
$ in thousands, except per share
Market Capitalization
Key Financials
12/31/2014
Financial Information:
12/31/2014
% of Total
Equity
Total Market
Capitalization
Rental revenues
$17,521
Market Data
General contracting and real estate services revenues
32,060
Total Common Shares Outstanding
63%
25,023
Rental properties Net Operating Income
(NOI) 11,572
Operating Partnership ("OP") Units
Outstanding 37%
14,776
General contracting and real estate services
gross profit 1,113
Common shares and OP units
outstanding 100%
39,799
Net income
5,226
Market price per common
share $9.49
Funds From Operations (FFO)
7,991
Equity market
capitalization $377,689
FFO per diluted share
$0.20
Total debt
359,229
Normalized FFO
8,156
Total market capitalization
$736,918
Normalized FFO per diluted share
$0.20
Less: cash
(30,107)
Core FFO
7,938
Total enterprise
value $706,811
Core FFO per diluted share
$0.20
Weighted Average Shares/Units Outstanding
39,796
Stable Portfolio Metrics
Debt Metrics
12/31/2014
Rentable square feet or number of units:
12/31/2014
Office
(1)
918,162
Key Metrics
Retail
(2)
1,200,738
Core debt/enterprise value
34.6%
Multifamily
(3)
626
Fixed
charge coverage ratio: EBITDA
(7)
$10,597
Occupancy:
Interest
2,671
Office
(4)
95.2%
Principal
800
Retail
(4)
96.4%
Total Fixed Charges
3,471
Multifamily
(5)
95.7%
Fixed charge coverage ratio
3.05x
Weighted Average
(6)
95.7%
Core Debt/Annualized Core EBITDA
6.1x
Three months ended
Three months ended
(1) Excludes 4525 Main Street
(2) Excludes Greentree Shopping Center
(3) Excludes Liberty, Encore, and Whetstone Apartments
(4) Office
and
retail
occupancy
based
on
leased
square
feet
as
a
%
of
respective
total
(5) Multifamily occupancy based on occupied units as a % of respective total
(6) Total occupancy weighted by annualized base rent
(7) Excludes $2.2M gain on disposition |
 Summary
Balance Sheet 9
$ in thousands
12/31/2014
12/31/2013
Assets
(Unaudited)
Real estate investments:
Income producing property
$513,918
$406,239
Construction in progress
81,082
56,737
Accumulated depreciation
(116,099)
(105,228)
Net real estate investments
478,901
357,748
Real estate investments held-for-sale
8,538
-
Cash and cash equivalents
25,883
18,882
Restricted cash
4,224
2,160
Accounts receivable, net
20,548
18,272
Construction receivables, including retentions
19,432
12,633
Costs and estimated earnings in excess of billings
272
1,178
Other assets
33,108
24,409
Total Assets
$590,906
$435,282
Liabilities and Equity
Indebtedness
$359,229
$277,745
Accounts payable and accrued liabilities
8,358
6,463
Construction payables, including retentions
42,399
28,139
Billings in excess of costs and estimated earnings
1,053
1,541
Other liabilities
17,961
15,873
Total Liabilities
429,000
329,761
Total Equity
161,906
105,521
Total Liabilities and Equity
$590,906
$435,282
As of |
 Summary
Income Statement 10
$ in thousands |
 Normalized FFO, Core FFO & AFFO
11
$ in thousands, except per share
(1) Excludes tenant improvements and leasing commissions on first generation rental
space. Three months ended
Year ended
12/31/2014
12/31/2014
(Unaudited)
Net income
$5,226
$12,759
Depreciation and amortization
4,976
17,569
Gain on acquisitions
(2,211)
(2,211)
FFO
7,991
28,117
FFO per weighted average share
$0.20
$0.80
Normalized FFO
Acquisition costs
55
229
Loss on extinguishment of debt
-
-
Impairment charges
-
15
Derivative (income) losses
110
233
Normalized FFO
8,156
28,594
Normalized FFO per weighted average share
$0.20
$0.82
Core FFO
Derivative income (losses)
(110)
(233)
Non-cash stock compensation
197
917
Non-stabilized development pipeline adjustments
(305)
79
Core FFO
7,938
29,357
Core FFO per weighted average share
$0.20
$0.84
AFFO
Non-Stabilized development pipeline adjustments
305
(79)
Acquisition costs
(55)
(229)
Tenant improvements, leasing commissions
(3,114)
(5,311)
Leasing incentives
(334)
(462)
Property related capital expenditures
(583)
(1,479)
Non cash interest expense
104
514
GAAP Adjustments
Net effect of straight-line rents
(394)
(1,887)
Amortization of lease incentives and above (below) market rents
172
633
Derivative (income) losses
110
233
Government development grants
-
300
AFFO
4,149
21,590
AFFO per weighted average share
$0.10
$0.62
(1) |
 Summary
of Outstanding Debt 12
$ in thousands
(1) LIBOR rate is determined by individual lenders.
(2) Subject to an interest rate swap lock.
(3) Principal balance excluding any fair value
adjustment recognized upon acquisition.
(4) Excludes fair value adjustment
Weighted Average Fixed Interest Rate
5.3%
Weighted Average Variable Interest Rate
2.1%
Total Weighted Average Interest Rate
(4)
3.4%
Variable Interest Rate as a % of Total (excluding interest rate caps)
(4)
59.7%
Weighted Average Maturity (years)
(4)
8.3
Debt
Amount
Outstanding
Interest Rate
(1)
Effective Rate as of
December 31, 2014
Maturity Date
Balance at
Maturity
Virginia Beach Town Center
249 Central Park Retail
$15,566
5.99%
September 8, 2016
$15,084
South Retail
6,867
5.99%
September 8, 2016
6,655
Studio 56 Retail
2,618
3.75%
May 7, 2015
2,592
Commerce Street Retail
5,549
LIBOR +2.25%
2.40%
October 31, 2018
5,264
Fountain Plaza Retail
7,783
5.99%
September 8, 2016
7,542
Dick's at Town Center
8,216
LIBOR+2.75%
2.90%
October 31, 2017
7,889
The Cosmopolitan
47,132
3.75%
July 1, 2051
-
Diversified Portfolio
Oyster Point
6,274
5.41%
December 1, 2015
6,089
Broad Creek Shopping Center
Note 1
4,452
LIBOR +2.25%
2.40%
October 31, 2018
4,223
Note 2
8,173
LIBOR +2.25%
2.40%
October 31, 2018
7,752
Note 3
3,422
LIBOR +2.25%
2.40%
October 31, 2018
3,246
Hanbury Village
Note 1
21,218
6.67%
October 11, 2017
20,499
Note 2
4,090
LIBOR +2.25%
2.40%
October 31, 2018
3,777
Harrisonburg Regal
3,659
6.06%
June 8, 2017
3,165
North Point Center
Note 1
10,149
6.45%
February 5, 2019
9,333
Note 2
2,753
7.25%
September 15, 2025
1,344
Note 5
685
LIBOR+2.00%
3.57%
(2)
February 1, 2017
641
Tyre Neck Harris Teeter
2,437
LIBOR +2.25%
2.40%
October 31, 2018
2,235
Smith's Landing
24,470
LIBOR+2.15%
2.30%
January 31, 2017
23,793
185,513
131,123
Credit Facility
59,000
LIBOR + 1.60% - 2.20%
1.90%
May 13, 2016
59,000
Total including Credit Facility
$244,513
$190,123
Development Pipeline
4525 Main Street
$30,870
LIBOR+1.95%
2.10%
January 30, 2017
30,870
Encore Apartments
22,215
LIBOR+1.95%
2.10%
January 30, 2017
22,215
Whetstone Apartments
16,019
LIBOR+1.90%
2.05%
October 8, 2016
16,019
Sandbridge Commons
5,892
LIBOR+1.85%
2.00%
January 17, 2018
5,892
Liberty Apartments
20,603
(3)
5.66%
November 1, 2043
-
Oceaneering
13,490
LIBOR+1.75%
1.90%
February 28, 2018
13,490
Commonwealth of Virginia - Chesapeake
3,585
LIBOR+1.90%
2.05%
August 28, 2017
3,585
Lightfoot Marketplace
3,484
LIBOR+1.90%
2.05%
November 14, 2017
3,484
Total Notes Payable - Development
Pipeline 116,158
95,555
Unamortized fair value adjustments
(1,442)
-
Total Notes Payable
$359,229
$285,678
4Q 2014
Year to Date
Capitalized Interest
$794
$2,752 |
 Core
Debt to Core EBITDA 13
Three months ended
12/31/2014
12/31/2014
(Unaudited)
(Unaudited)
Net Income
$5,226
Total Debt
$359,229
Excluding:
Excluding:
Interest Expense
2,671
Development
Pipeline Unstabilized Debt (114,716)
Income Tax
(65)
Depreciation and amortization
4,976
Core Debt
$244,513
EBITDA
12,808
Additional Adjustments:
Gain on dispositions
(2,211)
Early extinguishment of
debt -
Core Debt/Annualized Core EBITDA
6.1x
Derivative (income) losses
110
Non-cash stock compensation
197
Development Pipeline
(802)
Total Other Adjustments
(2,706)
Core EBITDA
$10,102
Annualized Core EBITDA
$40,408
$ in thousands |
 Debt
Information 14
$ in thousands
Interest Rate Cap Agreements At or Below 1.50%
Effective Date
Maturity Date
Strike Rate
Notional Amount
May 31, 2012
May 29, 2015
1.09%
$8,888
September 1, 2013
March 1, 2016
1.50%
40,000
October 4, 2013
April 1, 2016
1.50%
18,500
March 14, 2014
March 1, 2017
1.25%
50,000
Total Interest Rate Caps at or Below 1.50%
$117,388
Fixed Debt Outstanding (excludes fair value adjustment)
145,307
Total Fixed Interest Rate Debt (including caps)
$262,695
Fixed Interest Rate Debt as a % of Total
73%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2015
2017
2019 and
thereafter
Debt Maturity as of
12/31/2014
2016
2018 |
 Portfolio Summary & Business
Segment Overview |
 Stabilized Portfolio Summary
16
As of 12/31/14
Property
Location
Year Built
Net Rentable
Square Feet
(1)
Occupied Sq. Ft.
% Leased
(2)
Annualized
Base Rent
(3)
Annualized
Base Rent per
Leased Sq. Ft.
(3)
Average Net
Effective
Annual Base
Rent per
Leased Sq. Ft.
(4)
Office Properties
Armada Hoffler Tower
(5)
Virginia Beach, VA
2002
323,966
312,415
96.4%
$8,320,174
$26.63
$27.46
One Columbus
Virginia Beach, VA
1984
129,424
129,424
100.0%
3,018,331
23.32
23.34
Two Columbus
Virginia Beach, VA
2009
108,464
98,938
91.2%
2,528,923
25.56
25.75
Richmond Tower
Richmond, VA
2010
206,969
204,083
98.6%
7,569,747
37.09
41.81
Oyster Point
Newport News, VA
1989
100,139
80,128
80.0%
1,767,387
22.06
21.12
Sentara Williamsburg
(6)
Williamsburg, VA
2008
49,200
49,200
100.0%
1,006,140
20.45
20.50
Subtotal / Weighted Average Office Portfolio
(7)
918,162
874,188
95.2%
$24,210,702
$27.70
$29.04
Retail Properties Not Subject to Ground Lease
Bermuda Crossroads
Chester, VA
2001
111,566
109,966
98.6%
1,522,001
13.84
14.03
Broad Creek Shopping Center
Norfolk, VA
1997-2001
227,691
221,576
97.3%
3,091,636
13.95
12.66
Courthouse 7-Eleven
Virginia Beach, VA
2011
3,177
3,177
100.0%
125,000
39.35
43.81
Gainsborough Square
Chesapeake, VA
1999
88,862
85,782
96.5%
1,346,126
15.69
15.16
Hanbury Village
Chesapeake, VA
2006-2009
61,049
52,716
86.4%
1,278,659
24.26
24.46
North Point Center
Durham, NC
1998-2009
215,690
200,890
93.1%
2,383,713
11.87
11.91
Parkway Marketplace
Virginia Beach, VA
1998
37,804
37,804
100.0%
737,456
19.51
19.44
Harrisonburg Regal
Harrisonburg, VA
1999
49,000
49,000
100.0%
683,550
13.95
13.95
Dick's at Town Center
Virginia Beach, VA
2002
103,335
103,335
100.0%
1,179,866
11.42
11.72
249 Central Park Retail
(8)
Virginia Beach, VA
2004
91,171
83,481
91.6%
2,424,086
29.04
28.29
Studio 56 Retail
Virginia Beach, VA
2007
11,600
9,832
84.8%
371,200
37.75
37.58
Commerce Street Retail
(9)
Virginia Beach, VA
2008
19,173
19,173
100.0%
781,588
40.77
37.06
Fountain Plaza Retail
Virginia Beach, VA
2004
35,961
35,961
100.0%
970,230
26.98
26.79
South Retail
Virginia Beach, VA
2002
38,493
38,493
100.0%
921,559
23.94
24.31
Dimmock Square
Colonial Heights, VA
1998
106,166
106,166
100.0%
1,769,435
16.67
16.76
Subtotal / Weighted Avg Retail Portfolio not Subject to Ground Leases
(10)
1,200,738
1,157,352
96.4%
$19,586,105
$16.92
$16.61
Retail Properties Subject to Ground Lease
Bermuda Crossroads
(11)
Chester, VA
2001
(13)
100.0%
163,350
Broad Creek Shopping Center
(12)
Norfolk, VA
1997-2001
(14)
100.0%
588,126
Hanbury Village
(11)
Chesapeake, VA
2006-2009
(15)
100.0%
1,067,598
North Point Center
(11)
Durham, NC
1998-2009
(16)
100.0%
1,062,784
Tyre Neck Harris Teeter
(12)
Portsmouth, VA
2011
(17)
100.0%
508,134
Subtotal / Weighted Avg Retail Portfolio Subject to Ground Leases
100.0%
$3,389,992
Total / Weighted Avg Retail Portfolio
1,200,738
(18)
1,157,352
96.4%
$22,976,097
$16.92
$16.61
Total / Weighted Average Retail and Office Portfolio
2,118,900
2,031,540
95.9%
$47,186,799
$21.56
$21.95
Property
Location
Year Built
Units
(19)
% Leased
(2)
Annualized
Base Rent
(20)
Average
Monthly Base
Rent per
Leased Unit
(21)
Multifamily
Smith's Landing
(22)
Blacksburg, VA
2009
284
97.9%
$3,472,020
$1,040.77
The Cosmopolitan
Virginia Beach, VA
2006
342
93.9%
6,937,078
1,571.26
Total / Weighted Avg Multifamily Portfolio
626
95.7%
$10,409,098
$1,325.06 |
 Stabilized Portfolio Summary Footnotes
17
1)
The net rentable square footage for each of our office properties is the sum of (a) the square
footages of existing leases, plus (b) for available space, management’s estimate of net rentable square footage
based, in part, on past leases. The net rentable square footage included in office leases is
generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996
measurement guidelines. The net rentable square footage for each of our retail properties is
the sum of (a) the square footages of existing leases, plus (b) for available space, the field verified square
footage.
2)
Percentage leased for each of our office and retail properties is calculated as (a) square
footage under executed leases as of December 31, 2014, divided by (b) net rentable square feet, expressed as a
percentage. Percentage leased for our multifamily properties is calculated as (a) total units
occupied as of December 31, 2014, divided by (b) total units available, expressed as a percentage.
3)
For the properties in our office and retail portfolios, annualized base rent is calculated by
multiplying (a) base rental payments for executed leases as of December 31, 2014 (defined as cash base rents
(before abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b)
12. Annualized base rent per leased square foot is calculated by dividing (a) annualized base rent, by (b)
square footage under commenced leases as of December 31, 2014. In the case of triple net or
modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes,
insurance, common area or other operating expenses. 4)
Average net effective annual base rent per leased square foot represents (a) the contractual
base rent for leases in place as of December 31, 2014, calculated on a straight-line basis to amortize free rent
periods and abatements, but without regard to tenant improvement allowances and leasing
commissions, divided by (b) square footage under commenced leases as of December 31, 2014.
5)
As of December 31,2014, the Company occupied 18,984 square feet at this property at an
annualized base rent of $529,746 or $27.90 per leased square foot, which amounts are reflected in the % leased,
annualized base rent and annualized base rent per square foot columns in the table above. The
rent paid by us is eliminated from our revenues in consolidation. In addition, effective March 1, 2013, the
Company sublease approximately 5,000 square feet of space from a tenant at this property. 6)
This property is subject to a triple net lease pursuant to which the tenant pays operating
expenses, insurance and real estate taxes.
7)
Includes square footage and annualized base rent pursuant to leases for space occupied by us. 8)
As of December 31, 2014, the Company occupied 8,995 square feet at this property at an
annualized base rent of $287,300, or $31.94 per leased square foot, which amounts are reflected in the % leased,
annualized base rent and annualized base rent per square foot columns in the table above. The
rent paid by us is eliminated from our revenues in consolidation.
9)
Includes $32,460 of annualized base rent pursuant to a rooftop lease. 10)
Reflects square footage and annualized base rent pursuant to leases for space occupied by AHH.
11)
For this ground lease, the Company own the land and the tenant owns the improvements
thereto. The Company will succeed to the ownership of the improvements to the land upon the termination of
the ground lease.
12)
The Company lease the land underlying this property from the owner of the land pursuant to a
ground lease. The Company re-lease the land to our tenant under a separate ground lease pursuant to which
our tenant owns the improvements on the land. 13)
Tenants collectively lease approximately 139,356 square feet of land from us pursuant to
ground leases. 14)
Tenants collectively lease approximately 299,170 square feet of land from us pursuant to
ground leases. 15)
Tenants collectively lease approximately 105,988 square feet of land from us pursuant to
ground leases. 16)
Tenants collectively lease approximately 1,443,985 square feet of land from us pursuant to
ground leases. 17)
Tenant leases approximately 200,073 square feet of land from us pursuant to a ground lease. 18)
The total square footage of our retail portfolio excludes the square footage of land subject
to ground leases. 19)
Units represent the total number of apartment units available for rent at December 31,
2014. 20)
For the properties in our multifamily portfolio, annualized base rent is calculated by
multiplying (a) base rental payments for the month ended December 31, 2014 by (b) 12.
21)
Average monthly base rent per leased unit represents the average monthly rent for all leased
units for the month ended December 31, 2014.
22)
The Company lease the land underlying this property from the owner of the land pursuant to a
ground lease. 23)
The annualized base rent for The Cosmopolitan includes $885,000 of annualized rent from 15
retail leases at the property. |
 Development Pipeline
18
$ in thousands
(1) Represents estimates that may change as the development process proceeds
(2) Estimated square footage includes land subject to ground lease and will be excluded
from the portfolio square footage upon stabilization. (3) AHH earns a preferred
return on equity prior to any distributions to JV partners (4) This property is
located within the Virginia Beach Town Center (5) Approximately 83,000 square
feet is leased to Clark Nexsen, an architectural firm and
approximately 23,000 square feet is leased to the
Development Authority of Virginia Beach Schedule
(1)
Development, Not Delivered
Location
Estimated
(1)
Estimated
Cost
(1)
Cost Incurred
through
12/31/2014
Start
Initial
Occupancy
Stabilized
Operation
AHH
Ownership %
Property Type
%leased
Anchor Tenants
Oceaneering
Chesapeake, VA
155,000 sf
$26,000
$22,000
4Q13
1Q15
1Q15
100%
Office
100%
Oceaneering
Sandbridge Commons
Virginia Beach, VA
70,000 sf
(2)
13,000
9,000
4Q13
1Q15
4Q15
100%
Retail
86%
Harris Teeter
Commonwealth of VA -
Chesapeake
Chesapeake, VA
36,000 sf
7,000
7,000
2Q14
1Q15
1Q15
100%
Office
100%
Commonwealth of Virginia
Commonwealth of VA -
Virginia Beach
Virginia Beach, VA
11,000 sf
3,000
3,000
2Q14
1Q15
1Q15
100%
Office
100%
Commonwealth of Virginia
Lightfoot Marketplace
Williamsburg, VA
88,000 sf
(2)
24,000
11,000
3Q14
1Q16
2Q17
60%
(3)
Retail
60%
Harris Teeter
Johns Hopkins Village
Baltimore, MD
157 units
65,000
2,000
1Q15
3Q16
4Q16
80%
Multifamily
NA
NA
138,000
54,000
Schedule
(1)
Development, Delivered Not Stabilized
Location
Estimated
(1)
Estimated
Cost
(1)
Cost Incurred
through
12/31/2014
Start
Initial
Occupancy
Stabilized
Operation
AHH
Ownership %
(1)
Property Type
%leased
Anchor Tenants
4525 Main Street
(4)
Virginia Beach, VA
239,000 sf
(3)
$50,000
$44,000
1Q13
3Q14
1Q16
100%
Office
56%
(5)
Clark Nexsen, Development Authority
of Virginia Beach
, Anthropologie
Greentree Shopping Center
Chesapeake, VA
18,000 sf
(2)
6,000
5,000
4Q13
3Q14
3Q15
100%
Retail
73%
Wawa
Encore Apartments
(4)
Virginia Beach, VA
286 units
34,000
31,000
1Q13
3Q14
4Q15
100%
Multifamily
NA
NA
Whetstone Apartments
Durham, NC
203 units
29,000
27,000
2Q13
3Q14
4Q15
100%
Multifamily
NA
NA
119,000
107,000
Schedule
Re-Development
Location
Estimated
Estimated Cost
Cost Incurred
through
12/31/2014
Start
Complete
Property Type
%leased
Anchor Tenants
Dick's at Town Center
Virginia Beach, VA
20,000 sf
$2,000
$2,000
1Q14
4Q14
Retail
100%
USI
Total
$259,000
$163,000 |
 Acquisitions & Dispositions
19
$ in thousands
(1) Closed on 1/5/2015
Estimated
Pending Acquisitions
Location
Approximately
Purchase Price
Purchase Date
AHH
Ownership %
Property Type
%leased
Anchor Tenants
2 Grocery Anchor Shopping Centers
MD
185,000 sf
$39,500
1Q15
100%
Retail
90%
Grocery
Dispositions
Location
Approximately
Sale Price
Disposition
Date
AHH
Ownership %
Property Type
%leased
Anchor Tenants
Sentara Williamsburg
Williamsburg, VA
49,200 sf
$15,450
1Q15
(1)
100%
Office
100%
Sentara |
 Construction Business Summary
20
$ in thousands
Gross Profit Summary
Q4 2014
YTD 2014
(Unaudited)
Revenue
$32,060
$103,321
Expense
(30,947)
(98,754)
Gross Profit
$1,113
$4,567
Location
Total Contract
Value
Work in Place as
of 12/31/2014
Backlog
Estimated Date
of Completion
Projects Greater than $5.0M
Exelon
Baltimore, MD
$168,764
$42,785
$125,979
1Q 2016
City of Suffolk Municipal Center
Suffolk, VA
25,375
23,221
2,154
2Q 2015
Four Seasons Condominium Expansion
Baltimore, MD
24,053
3,073
20,980
4Q 2015
Sub Total
218,192
69,079
149,113
Projects Less than $5.0M
144,666
134,640
10,026
Total
$362,858
$203,719
$159,139
|
 Operating Results & Property-
Type Segment Analysis |
 Same
Store NOI by Segment 22
(Reconciliation to GAAP located in appendix pg. 38)
$ in thousands
Three months ended 12/31
Year ended 12/31
2014
2013
$ Change
% Change
2014
2013
$ Change
% Change
Office
(1)
(Unaudited)
(Unaudited)
Revenue
$6,499
$6,353
$146
2%
$25,640
$25,117
$523
2%
Expenses
2,036
1,903
133
7%
8,208
7,816
392
5%
Net Operating Income
4,463
4,450
13
0%
17,432
17,301
131
1%
Retail
(1)
Revenue
5,780
5,684
96
2%
20,874
20,474
400
2%
Expenses
1,712
1,725
(13)
-1%
6,487
6,525
(38)
-1%
Net Operating Income
4,068
3,959
109
3%
14,387
13,949
438
3%
Multifamily
(1)
Revenue
2,974
2,784
190
7%
7,758
7,494
264
4%
Expenses
1,277
1,254
23
2%
3,555
3,441
114
3%
Net Operating Income
1,697
1,530
167
11%
4,203
4,053
150
4%
Same Store Net Operating Income (NOI), GAAP basis
$10,228
$9,939
$289
3%
$36,022
$35,303
$719
2%
Net effect of straight-line rents
(198)
(187)
(11)
6%
(1,022)
(571)
(451)
79%
Amortization of lease incentives and above (below) market rents
159
142
17
12%
716
738
(22)
-3%
Same store portfolio NOI, cash basis
$10,189
$9,894
$295
3%
$35,716
$35,470
$246
1%
Cash Basis:
Office
$4,232
$4,131
$101
2%
$16,075
$16,257
($182)
-1%
Retail
4,229
4,205
24
1%
15,422
15,140
282
2%
Multifamily
1,728
1,558
170
11%
4,219
4,073
146
4%
$10,189
$9,894
$295
3%
$35,716
$35,470
$246
1%
GAAP Basis:
Office
$4,463
$4,450
$13
0%
$17,432
$17,301
$131
1%
Retail
4,068
3,959
109
3%
14,387
13,949
438
3%
Multifamily
1,697
1,530
167
11%
4,203
4,053
150
4%
$10,228
$9,939
$289
3%
$36,022
$35,303
$719
2%
(1) See page 37 for Same Store vs. Non - Same Store Properties
|
 Top 10
Tenants by Annual Base Rent 23
As of December 31, 2014
Office
Tenant
Number
of Leases
Number
of
Properties
Properties
Lease
Expiration
Annualized
Base Rent
% of Office
Portfolio
Annualized
Base Rent
% of Total
Portfolio
Annualized
Base Rent
Williams Mullen
3
2
Armada Hoffler Tower, Richmond Tower
3/22/2026
$7,978,920
33.0%
13.9%
Clark Nexsen
1
1
4525 Main Street
9/30/2029
2,390,656
9.9%
4.2%
Sentara Medical Group
1
1
Sentara Williamsburg
(1)
3/31/2023
1,006,140
4.2%
1.7%
Cherry Bekaert
3
3
Armada Hoffler Tower, Richmond Tower, Oyster Point
1/31/2025
958,984
4.0%
1.7%
Hampton University
2
1
Armada Hoffler Tower
2/28/2023
891,087
3.7%
1.5%
GSA
1
1
Oyster Point
4/26/2017
856,448
3.5%
1.5%
Troutman Sanders
1
1
Armada Hoffler Tower
1/31/2025
805,605
3.3%
1.4%
The Art Institute
1
1
Two Columbus
12/31/2019
787,226
3.3%
1.4%
Pender & Coward
1
1
Armada Hoffler Tower
1/31/2030
781,536
3.2%
1.4%
Kimley Horn
1
1
Two Columbus
12/31/2018
682,162
2.8%
1.2%
Top 10 Total
$17,138,764
70.8%
29.8%
Retail
Tenant
Number
of Leases
Number
of
Properties
Properties
Lease
Expiration
Annualized
Base Rent
% of Retail
Portfolio
Annualized
Base Rent
% of Total
Portfolio
Annualized
Base Rent
Home Depot
2
2
Broad Creek Shopping Center, North Point Center
12/3/2019
$2,189,900
9.5%
3.8%
Harris Teeter
2
2
Tyre Neck Harris Teeter, Hanbury Village
10/16/2028
1,430,532
6.2%
2.5%
Food Lion
3
3
Broad Creek Shopping Center, Bermuda Crossroads,
Gainsborough Square
3/19/2020
1,282,568
5.6%
2.2%
Dick's Sporting Goods
1
1
Dick's at Town Center
1/31/2020
798,000
3.5%
1.4%
Regal Cinemas
1
1
Harrisonburg Regal
4/23/2019
683,550
3.0%
1.2%
PetSmart
2
2
Broad Creek Shopping Center, North Point Center
7/21/2018
618,704
2.7%
1.1%
Kroger
1
1
North Point Center
8/31/2018
552,864
2.4%
1.0%
Yard House
1
1
Commerce Street Retail
11/30/2023
538,000
2.3%
0.9%
Rite Aid
2
2
Gainsborough Square, Parkway Marketplace
5/29/2019
484,193
2.1%
0.8%
Walgreens
1
1
Hanbury Village
12/31/2083
447,564
1.9%
0.8%
Top 10 Total
$9,025,875
39.3%
15.7%
(1) Sold 1/5/15 |
 Office
Lease Summary 24
Renewal Lease Summary
(1)
GAAP
Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net rentable
SF Expiring
Contractual
Rent per SF
Prior Rent
per SF
Annual
Change in
Rent per SF
Contractual
Rent per SF
Prior Rent
per SF
Annual Change
in Rent per SF
Weighted
Average Lease
Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
4th Quarter 2014
6
26,386
3
5,726
$21.08
$21.23
($0.15)
$20.50
$22.14
($1.65)
3.65
$182,728
$6.93
3rd Quarter 2014
3
6,859
2
6,082
18.50
19.63
(1.13)
18.48
19.85
(1.36)
2.62
68,913
10.05
2nd Quarter 2014
2
18,824
1
8,452
25.12
24.33
0.79
25.37
27.55
(2.18)
7.75
204,718
10.88
1st Quarter 2014
1
25,506
2
5,430
32.28
26.66
5.63
29.95
29.25
0.70
10.00
1,315,127
51.56
New Lease Summary
(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Contractual
Rent per SF
Weighted
Average
Lease Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
4th Quarter 2014
1
4,754
$17.50
10.00
$103,266
$21.72
3rd Quarter 2014
2
2,853
22.65
2.56
55,892
19.59
2nd Quarter 2014
4
6,948
20.18
4.28
190,255
27.38
1st Quarter 2014
2
5,430
24.12
1.00
5,239
0.96
(1) Excludes leases for space occupied by AHH. |
 Office
Lease Expirations 25
1.8%
4.0%
6.5%
18.3%
9.4%
4.9%
4.0%
5.4%
10.6%
35.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Year of Lease Expiration
Number of
Leases
Expiring
Square
Footage of
Leases
Expiring
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available
-
43,974
4.8%
$0
-
$0.00
2015
12
17,012
1.9%
424,967
1.8%
24.98
2016
15
41,197
4.5%
977,367
4.0%
23.72
2017
6
65,186
7.1%
1,564,421
6.5%
24.00
2018
19
162,718
17.7%
4,435,761
18.3%
27.26
2019
10
95,977
10.5%
2,268,983
9.4%
23.64
2020
5
43,731
4.8%
1,176,453
4.9%
26.90
2021
4
41,363
4.5%
973,852
4.0%
23.54
2022
3
48,117
5.2%
1,295,525
5.4%
26.92
2023
4
115,889
12.6%
2,578,196
10.6%
22.25
Thereafter
8
242,998
26.5%
8,515,178
35.2%
35.04
Total / Weighted Average
86
918,162
100.0%
24,210,702
$
100.0%
$27.70 |
 Retail
Lease Summary 26
Renewal Lease Summary
(1)
GAAP
Cash
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Leases
Expiring
Net
rentable SF
Expiring
Contractual
Rent per SF
Prior Rent
per SF
Annual Change
in Rent per SF
Contractual
Rent per SF
Prior Rent
per SF
Annual Change
in Rent per SF
Weighted
Average Lease
Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
4th Quarter 2014
6
17,361
2
2,991
$24.91
$21.35
$3.57
$24.80
$23.10
$1.71
4.37
$18,858
$1.09
3rd Quarter 2014
6
26,900
3
6,012
17.64
16.19
1.45
17.76
16.98
0.78
5.11
44,109
1.64
2nd Quarter 2014
6
12,916
2
3,842
20.47
19.66
0.81
20.20
20.65
(0.46)
1.87
5,730
0.44
1st Quarter 2014
5
23,857
3
6,540
20.84
20.41
0.43
21.18
21.82
(0.64)
4.55
63,339
2.65
New Lease Summary
(1)
Quarter
Number of
Leases
Signed
Net rentable
SF Signed
Contractual
Rent per SF
Weighted
Average
Lease Term
TI, LC, &
Incentives
TI, LC, &
Incentives
per SF
4th Quarter 2014
1
2,140
$16.00
5.00
$2,140
$1.00
3rd Quarter 2014
7
35,574
20.30
6.83
522,738
14.69
2nd Quarter 2014
4
10,574
25.73
7.78
1,071,485
101.33
1st Quarter 2014
1
3,160
16.25
10.50
126,558
40.05
(1) Excludes leases from space occupied by AHH |
 Retail
Lease Expiration 27
Year of Lease Expiration
Number of
Leases
Expiring
Square
Footage of
Leases
Expiring
% Portfolio
Net Rentable
Square Feet
Annualized
Base Rent
% of Portfolio
Annualized
Base Rent
Annualized Base
Rent per Leased
Square Foot
Available
-
43,386
3.6%
$0
-
$0.00
2015
16
51,906
4.3%
1,063,979
5.4%
20.50
2016
23
73,259
6.1%
1,651,561
8.4%
22.54
2017
25
152,603
12.7%
2,223,266
11.4%
14.57
2018
23
136,687
11.4%
2,034,025
10.4%
14.88
2019
25
327,441
27.3%
4,795,310
24.5%
14.64
2020
18
200,877
16.7%
2,770,104
14.1%
13.79
2021
5
25,204
2.1%
740,832
3.8%
29.39
2022
6
83,588
7.0%
1,216,663
6.2%
14.56
2023
6
49,460
4.1%
1,331,093
6.8%
26.91
Thereafter
11
56,327
4.7%
1,759,270
9.0%
31.23
Total / Weighted Average
158
1,200,738
100.0%
19,586,105
$
100.0%
$16.92
5.4%
8.4%
11.4%
10.4%
24.5%
14.1%
3.8%
6.2%
6.8%
9.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0% |
  Historical
Occupancy 28
(1) Office and retail occupancy based on occupied square feet as a % of respective
total (2) Multifamily occupancy based on occupied units as a % of respective total
(3) Total occupancy weighted by annualized base rent
Occupancy -
All Properties
as of
Sector
12/31/2014
9/30/2014
6/30/2014
3/31/2014
12/31/2013
Office
(1)
95.2%
94.8%
95.3%
95.4%
95.2%
Retail
(1)
96.4%
94.7%
93.5%
93.4%
93.4%
Multifamily
(2)
95.7%
96.6%
94.9%
94.2%
94.2%
Weighted Average
(3)
95.7%
95.1%
94.6%
94.5%
94.4% |
 Multifamily Occupancy
29
Occupancy Summary - Smiths Landing (284 available units)
Quarter Ended
Number of Units
Occupied
Percentage
Occupied
(1)
Annualized Base
Rent
(2)
Average Monthly Rent
per Occupied Unit
12/31/2014
278
97.9%
$3,472,020
$1,041
9/30/2014
274
96.5%
3,379,428
1,028
6/30/2014
273
96.1%
3,321,096
1,014
3/31/2014
283
99.6%
3,430,260
1,010
12/31/2013
282
99.3%
3,382,380
1,000
Occupancy
Summary - The Cosmopolitan (342 available units) Quarter Ended
Number of Units
Occupied
Percentage
Occupied
(1)
Annualized Base
Rent
(2)(4)
Average Monthly Rent
per Occupied Unit
(3)
12/31/2014
321
93.9%
$6,052,488
$1,571
9/30/2014
331
96.8%
6,218,892
1,566
6/30/2014
321
93.9%
6,042,132
1,569
3/31/2014
307
89.8%
5,799,564
1,574
12/31/2013
308
90.1%
5,721,144
1,548
(1) Total units occupied as of each respective date
(2)
Annualized base rent is calculated by multiplying (a) contractual rent due from our tenants
for the last month of the respective quarter by (b) 12 (3)
Average Monthly Rent per Occupied Unit is calculated as (a) annualized base
rent divided by (b) the number of occupied units as of the end of the respective date.
(4)
Excludes annualized base rent from retail leases
|
 30
Components of NAV
Stabilized Portfolio NOI x Market Cap Rate = Stabilized Portfolio Value
Investment in Unstabilized Development Pipeline
Stabilized
Development
Pipeline
NOI
x
Market
Cap
Rate
=
Stabilized
Development
Portfolio
Value
Annualized General Contracting and Real Estate Services x Appropriate Multiple = TRS
Value Other Assets
Liabilities
NAV |
 Net
Asset Value Component Data 31
$ in thousands
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP
purposes (2) Completed Not Stabilized properties are presented in our Consolidated
Balance Sheet as Income Producing Property Stabilized Portfolio NOI (Cash)
Other Assets
Three months
ended
Annualized
As of 12/31/2014
12/31/2014
12/31/2014
Other Assets
Diversified
Portfolio
Cash and Cash Equivalents
$25,883
Office
$2,050
$8,200
Restricted Cash
4,224
Retail
3,493
13,972
Accounts Receivable
20,548
Multifamily
613
2,452
Construction receivables, including retentions
19,432
Total Diversified Portfolio NOI
$6,156
$24,624
Other Assets
33,380
Total Other Assets
$103,467
Virginia
Beach
Town Center
Office
(1)
$2,338
$9,352
Liabilities & Share Count
Retail
(1)
1,252
5,008
As of 12/31/2014
Multifamily
1,115
4,460
Liabilities
Total Virginia Beach Town Center NOI
$4,705
$18,820
Mortgages and notes payable
$359,229
Accounts payable and accrued liabilities
8,358
Stabilized Portfolio NOI (Cash)
$10,861
$43,444
Construction payables, including retentions
42,399
Other Liabilities
19,014
Development Pipeline
Total Liabilities
$429,000
12/31/2014
Construction in Progress: (pg. 9 balance sheet)
$81,082
Three months
ended
99,115
Share Count
12/31/2014
Weighted Average Common Shares Outstanding
25,020
Taxable REIT Subsidiary (TRS)
Weighted Average Operating Partnership ("OP") Units Outstanding
14,776
Full Year
Total Weighted Average Common shares and OP units outstanding
39,796
12/31/2014
General Contracting and Real Estate Services
$4,567
Development Pipeline Completed Not Stabilized at Cost
(2)
|
 Appendix –
Definitions & Reconciliations |
 Definitions
Net Operating Income:
Funds From Operations:
33
We calculate Net Operating Income (“NOI”) as property revenues (base rent,
expense reimbursements and other revenue) less property expenses (rental
expenses and real estate taxes). For our office, retail and multifamily
segments, NOI excludes general contracting and real estate services expenses,
depreciation and amortization, general and administrative expenses, and
impairment charges. Other REITs may use different methodologies for calculating
NOI, and accordingly, our NOI may not be comparable to such other REITs’
NOI. NOI is not a measure of operating income or cash flows from operating
activities as measured by GAAP and is not indicative of cash available to fund
cash needs. As a result, net operating income should not be considered an alternative
to cash flows as a measure of liquidity. We consider NOI to be an
appropriate supplemental measure to net income because it assists both investors
and management in understanding the core operations of our real estate business.
(Reconciliation to GAAP located in appendix pg. 40)
We calculate Funds From Operations (“FFO”) in accordance with the standards
established by the National Association of Real Estate Investment Trusts
(“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with
accounting principles generally accepted in the United States (“GAAP”)),
excluding gains (or losses) from sales of depreciable operating property, real
estate related depreciation and amortization (excluding amortization of deferred
financing costs) and after adjustments for unconsolidated partnerships and joint
ventures. FFO is a supplemental non-GAAP financial measure. Management uses FFO as a
supplemental performance measure because it believes that FFO is beneficial to
investors as a starting point in measuring our operational performance.
Specifically, in excluding real estate related depreciation and amortization and gains
and losses from property dispositions, which do not relate to or are not
indicative of operating performance, FFO provides a performance measure that,
when compared year over year, captures trends in occupancy rates, rental rates and operating costs.
Other equity REITs may not calculate FFO in accordance with the NAREIT definition as we
do, and, accordingly, our FFO may not be comparable to such other REITs’
FFO. |
 Definitions
Normalized Funds From Operations:
Core Funds From Operations:
34
We calculate Core Funds From Operations ("Core FFO") as Normalized FFO adjusted
for mark-to-market adjustments on interest rate derivatives, noncash
stock compensation expense and the impact of development pipeline projects that
are still in lease-up. We generally consider a property to be in lease-up
until the earlier of (i) the quarter after which the property reaches 80%
occupancy or (ii) the thirteenth quarter after the property receives its certificate of
occupancy.
Management believes that the computation of FFO in accordance to NAREIT’s
definition includes certain items that are not indicative of the results
provided by the Company’s operating portfolio and affect the comparability of the
Company’s period-over-period performance. Our calculation of Core
FFO differs from NAREIT's definition of FFO. Other equity REITs may not
calculate Core FFO in the same manner as us, and, accordingly, our Core FFO may not be
comparable to other REITs' Core FFO.
We calculate Normalized Funds From Operations (“Normalized FFO") as FFO
calculated in accordance with the standards established by NAREIT, adjusted for
acquisition, development and other pursuit costs, gains or losses from the early
extinguishment of debt, impairment charges, mark-to-market adjustments on interest rate derivatives and
other nonrecurring or noncomparable items.
Management believes that the computation of FFO in accordance to NAREIT’s
definition includes certain items that are not indicative of the results
provided by the Company’s operating portfolio and affect the comparability of the
Company’s period-over-period performance. Our calculation of
Normalized FFO differs from NAREIT's definition of FFO Other equity REITs may not
calculate Normalized FFO in the same manner as us, and, accordingly, our Normalized FFO
may not be comparable to other REITs' Normalized FFO.
|
 Definitions
Adjusted Funds From Operations:
EBITDA:
35
We calculate Adjusted Funds From Operations (“AFFO”) as Core FFO, (i)
excluding the impact of tenant improvement and leasing commission costs, capital
expenditures, the amortization of deferred financing fees, derivative (income)
loss, the net effect of straight-line rents and the amortization of lease
incentives and net above (below) market rents and (ii) adding back the impact of
development pipeline projects that are still in lease-up and government
development grants that are not included in FFO.
Management believes that AFFO provides useful supplemental information to investors
regarding our operating performance as it provides a consistent comparison of
our operating performance across time periods and allows investors to more
easily compare our operating results with other REITs. However, other REITs may use different
methodologies for calculating AFFO or similarly entitled FFO measures and, accordingly,
our AFFO may not always be comparable to AFFO or other similarly entitled FFO
measures of other REITs. We calculate EBITDA as net income (loss) (calculated in accordance with GAAP),
excluding interest expense, income taxes and depreciation and amortization.
Management believes EBITDA is useful to investors in evaluating and facilitating
comparisons of our operating performance between periods and between REITs by removing the impact of
our capital structure (primarily interest expense) and asset base (primarily
depreciation and amortization) from our operating results. |
 Definitions
Core EBITDA:
We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited
to, non-recurring or extraordinary gains (losses), early extinguishment of
debt, derivative (income) losses, acquisition costs and the impact of
development pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the
earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the
thirteenth quarter after the property receives its certificate of occupancy.
Management believes that Core EBITDA provides useful supplemental information to
investors regarding our ongoing operating performance as it provides a consistent comparison of our
operating performance across time periods and allows investors to more easily compare
our operating results with other REITs. However, other REITs may use different
methodologies for calculating Core EBITDA or similarly entitled measures and,
accordingly, our Core EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures
of other REITs.
Core Debt:
We calculate Core Debt as our total debt, excluding any construction loans associated
with our development pipeline. Same Store Portfolio:
We define same store properties as including those properties that were owned and
operated for the entirety of the period being presented and excluding properties
that were in lease-up during the period present. We generally
consider
a
property
to
be
in
lease-up
until
the
earlier
of
(i)
the
quarter
after
which
the
property
reaches
80%
occupancy
or (ii) the thirteenth quarter after the property receives its certificate of
occupancy. The following table shows the properties included in the same
store and non-same store portfolio for the comparative periods presented.
36 |
 Same
Store vs. Non-Same Store Properties 37
Same Store
Non-Same Store
Same Store
Non-Same Store
Office Properties
Armada Hoffler Tower
X
X
One Columbus
X
X
Two Columbus
X
X
Richmond Tower
X
X
Oyster Point
X
X
Sentara Williamsburg
X
X
4525 Main Street
X
X
Virginia Natural Gas
X
X
Retail Properties
Bermuda Crossroads
X
X
Broad Creek Shopping Center
X
X
Courthouse 7-Eleven
X
X
Dimmock Square
X
X
Gainsborough Square
X
X
Hanbury Village
X
X
North Point Center
X
X
Parkway Marketplace
X
X
Harrisonburg Regal
X
X
Dick’s at Town Center
X
X
249 Central Park Retail
X
X
Studio 56 Retail
X
X
Commerce Street Retail
X
X
Fountain Plaza Retail
X
X
South Retail
X
X
Tyre Neck Harris Teeter
X
X
Greentree Shopping Center
X
X
Multifamily Properties
Encore Apartments
X
X
Smith’s Landing
X
X
The Cosmopolitan
X
X
Liberty Apartments
X
X
Whetstone Apartments
X
X
Comparison of Year Ended
December 31, 2014 to 2013
Comparison of Three Months Ended
December 31, 2014 to 2013 |
 Reconciliation to GAAP -
Segment Portfolio NOI
38
$ in thousands
(1) See page 37 for Same Store vs. Non-Same Store Properties
Three months ended 12/31
Year ended 12/31
2014
2013
2014
2013
Office Same Store
(1)
Rental revenues
$6,499
$6,353
$25,640
$25,117
Property expenses
2,036
1,903
8,208
7,816
NOI
4,463
4,450
17,432
17,301
Non-Same Store NOI
744
149
1,685
601
Segment NOI
$5,207
$4,599
$19,117
$17,902
Retail Same Store
(1)
Rental revenues
$5,780
$5,684
$20,874
$20,474
Property expenses
1,712
1,725
6,487
6,525
NOI
4,068
3,959
14,387
13,949
Non-Same Store NOI
531
-
2,461
1,027
Segment NOI
$4,599
$3,959
$16,848
$14,976
Multifamily Same Store
(1)
Rental revenues
$2,974
$2,784
$7,758
$7,494
Property expenses
1,277
1,254
3,555
3,441
NOI
1,697
1,530
4,203
4,053
Non-Same Store NOI
69
-
2,168
1,440
Segment NOI
1,766
1,530
$6,371
$5,493
Total Segment Portfolio NOI
$11,572
$10,088
$42,336
$38,371 |
 Reconciliation to GAAP -
Segment Portfolio NOI
39
$ in thousands
Three months ended 12/31/2014
Diversified Portfolio
Office
Retail
Multifamily
Total
Cash NOI
$2,050
$3,493
$613
$6,156
Net effect of straight-line rents
192
(100)
(13)
79
Amortization of lease incentives and (above) below market rents
(12)
46
(13)
21
GAAP NOI
$2,230
$3,439
$587
$6,256
Town Center of Virginia Beach
Office
Retail
Multifamily
Total
Cash NOI
$2,338
$1,252
$1,115
$4,705
Net effect of straight-line rents
79
53
(5)
127
Amortization of lease incentives and (above) below market rents
(28)
(145)
-
(173)
Elimination of AHH rent
(156)
(74)
-
(230)
GAAP NOI
$2,233
$1,086
$1,110
$4,429
GAAP NOI
Office
Retail
Multifamily
Total
Diversified Portfolio
$2,230
$3,439
$587
$6,256
Town Center of Virginia Beach
2,233
1,086
1,110
4,429
Unstabilized Properties
744
74
69
887
Total Segment Portfolio GAAP NOI
$5,207
$4,599
$1,766
$11,572 |
 Reconciliation to GAAP -
Segment Portfolio NOI
$ in thousands
40
Office
Retail
Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services
Total
Segment revenues
7,464
$
6,397
$
3,660
$
17,521
$
32,060
$
49,581
$
Segment expenses
2,257
1,798
1,894
5,949
30,947
36,896
Net operating income
5,207
$
4,599
$
1,766
$
11,572
$
1,113
$
12,685
$
Depreciation and amortization
(4,976)
General and administrative expenses
(1,943)
Acquisition, development and other pursuit costs
(55)
Impairment charges
-
Interest expense
(2,671)
Gain on dispositions
2,211
Other expense
(90)
Income tax benefit
65
Net income
5,226
$
Office
Retail
Multifamily
Total Rental
Properties
General Contracting &
Real Estate Services
Total
Segment revenues
27,827
$
23,956
$
12,963
$
64,746
$
103,321
$
168,067
$
Segment expenses
8,710
7,108
6,592
22,410
98,754
121,164
Net operating income
19,117
$
16,848
$
6,371
$
42,336
$
4,567
$
46,903
$
Depreciation and amortization
(17,569)
General and administrative expenses
(7,711)
Acquisition, development and other pursuit costs
(229)
Impairment charges
(15)
Interest expense
(10,648)
Gain on dispositions
2,211
Other expense
(113)
Income tax provision
(70)
Net income
12,759
$
Three months ended 12/31/2014
Year ended 12/31/2014 |